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Obama says voters may blame him for economy

Washington (AP) - President Barack Obama insisted Friday that
the U.S. economy is digging itself out of the deepest recession in
decades but conceded that "progress has been painfully slow" and
many voters in November's elections may blame him.

Facing a rising jobless rate, Obama told a White House news
conference: "For all the progress we've made, we're not there yet.
And that means people are frustrated and why people are angry."

"Because I am president, and the Democrats have control of the
House and Senate, it's understandable that people are saying, 'What
have you done?"'

The president, who also is the leader of the Democratic Party,
spent much of his appearance before cameras on the defensive,
underscoring his frustration with being unable to convince the
public that his economic fixes are working.

At his first formal session with reporters since May, one that
lasted nearly an hour and 20 minutes, Obama also appealed to
Americans to stand by the nation's long heritage of religious
tolerance.

The Rev. Terry Jones, from a small fundamentalist church in
Florida, triggered outrage when he promised to burn the Quran on
Saturday's anniversary of the Sept. 11 attacks. He canceled the
plans Thursday but then said he was reconsidering. Obama said he
hopes Jones "prays on it and refrains from doing it."

Declining to mention Jones' name, Obama referred to him as "the
individual down in Florida."

A debate is also raging over whether an Islamic center should be
built near the site of the Sept. 11, 2001, attacks on the World
Trade Center in New York.

Obama said people must remember that the country's enemy is not
Islam but al-Qaida and other extremist groups. He said Americans
can't turn on each other and let their fears lead to divisions.

On the eve of the ninth anniversary of the terror attacks, Obama
said the U.S. is still hunting for attacks mastermind Osama bin
Laden. He said bin Laden had gone "deep underground" but efforts
to hunt him down would go on "as long as I'm president."

He said "the folks who are most interested in the war between
Islam and the West are al-Qaida. That's what they've been banking
on." He said the battle was against just a handful of people "who
are engaging in hateful acts."

He counseled respect and inclusion for Muslims in the United
States. He said, "They are Americans. We don't differentiate
between 'them' and 'us.' It's just us."

As for continued terror threats against America, nine years
after 9/11, Obama said, "There is always going to be the potential
for an individual or a small group of individuals, if they are
willing to die, to kill other people. ... That threat is there, and
it's important, I think, for the American people to understand
that. And not to live in fear; it's just a reality of today's world
that there are going to be threats out there."

He added, "We are going to have this problem out there for a
long time to come, but it doesn't have to completely distort us and
it doesn't have to dominate our foreign policy. What we can do is
to constantly fight against it."

On the economy, Obama repeated his contention that Republican
obstructionism is hampering his ability to steer the nation into a
stronger recovery. He renewed his insistence that Senate
Republicans drop their stalling of a bill before the Senate to help
small businesses.

And he said yet again that Bush-era tax cuts should be extended
for individuals earning less than $200,000 a year and joint filers
earning less than $250,000. All the Bush tax cuts are to expire at
the end of this year unless Congress acts.

Some prominent Democrats recently have suggested temporarily
extending all of the expiring cuts, for perhaps a year or two, as a
compromise. But so far Obama has dug in and rejected all talk of
such a deal.

He said extending tax cuts for the wealthiest Americans "is a
bad idea."

Obama repeatedly sought to justify the high-dollar actions his
administration has taken to boost a sputtering recovery. And he
blamed Republicans for holding back future progress by uniformly
opposing other proposals on the table.

His previous revival efforts have worked, Obama said, but
"haven't done as much as we needed to do." With public opinion
sour on the first economic stimulus plan, Obama initially refused
to call the three-pronged economic plan he laid out this week a
"stimulus" plan but then said: "There's no doubt that everything
we've been trying to do .. . is designed to stimulate growth and
jobs in the entire economy."

Much of the summer has been marked by one discouraging economic
report after another.

Yet, reports so far this month -from manufacturing to new
jobless claims to home sales to business activity - have topped
most forecasts. That has brightened the outlook somewhat as worries
of a "double-dip" recession fade.

Still, there is little that Obama can do that is likely to turn
the economy around in the short time before Election Day on Nov. 2.

Facing a possible GOP blowout in November, many Democrats who
supported Obama earlier this year on his landmark health care
overhaul bill have sought to distance themselves from the unpopular
law. Some Democrats have actively criticized it as they campaign.

Asked why this was so, Obama cited a "political season" in
which he said every candidate has "their own district, their own
makeup, their own plan, their own message."

With the unemployment rate at 9.6 percent, Obama said that
Democratic and Republican candidates alike "are going to make the
best argument they can right now."

"That's how political races work," he said.
Obama over the past week has outlined a trio of job-creation
ideas designed to prod the economy: $50 billion for roads, rail
lines and other infrastructure spending, a permanent research and
development credit and upfront 100 percent business write-offs
through 2012.

With polls suggesting that voters have decided - rightly or
wrongly - that his $814 billion stimulus plan last year was less
than a success, the White House has been steering clear of
portraying these new items as another stimulus.

Yet when he was asked directly whether the unpopularity of the
first stimulus was the reason White House officials weren't using
that word this time, Obama said:

"I have no problem with people saying the president is trying
to stimulate growth and jobs. There's no doubt that everything
we've been trying to do ... is designed to stimulate growth and
jobs in the entire economy." He said he hoped Republicans had the
same goal.

Facing a possible GOP blowout in November, Obama sought to rally
his struggling party, casting Democrats as warriors for the
hard-pressed middle class and Republicans as protectors of
millionaires and special interests.

Asked how he had changed Washington, Obama said the dreadful
economy made it hard to demonstrate real progress.

- Said he was naming White House economist Austan D. Goolsbee to
succeed Christina Romer as chairman of the president's Council of
Economic Advisers.

- Said he is encouraging peace talks between Israel and the
Palestinians because the alternative is a status quo that puts both
parties - and the U.S. - at risk.

- Praised consumer advocate Elizabeth Warren, a Harvard
professor and head of a panel investigating the financial meltdown,
but said he's not ready to make an announcement of whether she is
his choice to head a new financial consumer protection bureau.

- His administration has fallen short in his goal of closing the
Guantanamo Bay detention center after promising to close it within
his first year as president. He said he still believes the American
justice system is capable of prosecuting, convicting and holding
terrorists who have attacked the U.S.